Biden Administration Greenlights Samsung and SK Hynix's Expansion in China Despite Prevailing Restrictions

The Biden administration has granted Samsung Electronics Co SSNLF and SK Hynix Inc, the world's two largest memory makers, permission to acquire the equipment essential for maintaining and expanding their significant chipmaking operations in China. 

This move comes as a waiver to the broader restrictions that prohibited the shipment of advanced chipmaking gear to China. 

The U.S. concession enables both tech giants to import sophisticated American machinery, essential for their long-term operation in the global chip sector, Bloomberg reports.

Also Read: Samsung Earmarks $229B To Cement Korea's Chip Building Position As US - China Intensifies

The decision to lift the restrictions has resolved a significant trade issue for Korean semiconductor companies, according to Choi Sang-mok, a presidential economic advisor, Bloomberg noted. 

He highlighted the critical role of Korean chip companies, responsible for 60.5% of the world's memory output, emphasizing that their stable production is integral to the global semiconductor supply chain's stability.

U.S.'s Chips and Science Act bars companies procuring federal funding from materially expanding production of chips more advanced than 28-nm in China or a country of concern like Russia for ten years. 

In 2022, Hynix expressed concerns that the U.S.'s stringent chip export restrictions could potentially lead to the shutdown or sale of a significant plant in China. 

The company operates a DRAM factory in Wuxi, central China, a substantial source of its global memory chips, and NAND facilities in Dalian, northern China. 

The easing of restrictions ensures that memory chips produced in China can be integrated into various products, including those assembled for U.S. companies like Apple Inc AAPL.

Both companies had initially secured a one-year waiver allowing equipment importation but faced doubts about the extension. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.